Sunday, September 16, 2007

Saskatchewan Party support for The Crown Corporations Public Ownership Act misleading; review and legislative changes likely if elected

“[W]e believe all but four of the major Crowns should be dispensed.”–Brenda Bakken, Saskatchewan Party MLA for Weyburn-Big Muddy, Weyburn Review, June 19, 2002

On August 21, 2007, the Saskatchewan Party issued a news release refuting claims that if elected it would, among other things, privatize Crown corporations. Citing a leaked NDP election brochure that his party had obtained leader Brad Wall called the accusations “scare tactics.”

“[T]he NDP knows the Saskatchewan Party will not privatize any of the utility Crowns. In fact, our MLAs voted in favour of The Crown Corporations Public Ownership Act, just like the NDP MLAs,” Wall said.

Fact: The Saskatchewan Party will not privatize the Crown Corporations.

Saskatchewan Party MLAs unanimously supported The Crown Corporations Public Ownership Act, introduced by the NDP government in 2004.

Saskatchewan Party Policy: That a Saskatchewan Party government supports The Crown Corporations Public Ownership Act and will retain public ownership of our major crown corporations as important tools in the provision of utility services to Saskatchewan families and businesses and important partners in the economic development of Saskatchewan.

A good starting point to understanding the Saskatchewan Party’s true feelings about Crown corporations is a June 19, 2002, article in the Weyburn Review by Ricardo Gloria and Daniel Savoie.

Report critical of prov. gov't discusses a study by the Fraser Institute that criticizes the NDP coalition government’s tax policies and the use of Crown corporations within the province.

“Saskatchewan can achieve great prosperity and emulate the economic achievements of provinces like Alberta if it undertakes dramatic reforms,” said Jason Clemens, director of fiscal studies at The Fraser Institute, and co-author of the study in a May 27, 2002 news release.

According to the Institute, Saskatchewan’s “sluggish” investment performance could partly “be attributed to the province’s excessive reliance on Crown Corporations. Crown Corporations tend to develop with less capital and more labour than their private sector counterparts. Saskatchewan’s large Crown Corporation sector (the largest in Canada), coupled with their low levels of capitalization, remain an impediment to business development.”

The report Saskatchewan Prosperity: Taking the Next Step (May 2002) recommended that Saskatchewan immediately “Review all Crown Corporations and identify those that can be privatized quickly and those that may require more time to privatize. All proceeds from privatization must be earmarked to reducing the province’s accumulated debt.”

The Fraser report echoed the sentiments of Saskatchewan Party Leader Brad Wall who in the legislature on March 25, 2002, said “let’s review the Crowns, let’s review them with a view to doing what’s right for the province of Saskatchewan…Pending this review, we would put a moratorium on all out-of-province investments by the Crown corporations. And…we would put an end, an unequivocal and absolute end to the amazing practice of this government of using the Crown corporations to compete with small-business men and women. You bet we would do that.”

The Fraser report also appeared to be music to the ears of Brenda Bakken, the Saskatchewan Party MLA for Weyburn-Big Muddy.

“The Fraser Institute report has all the elements of our policies and is a positive endorsement of what we’ve been saying for years,” Bakken told the Weyburn Review. “We need to get taxes down to where our neighbors are, and we believe all but four of the major Crowns should be dispensed.”

Bakken identified the four protectable crown corporations as SGI, SaskPower, SaskTel and SaskEnergy. This is important to remember because, as it turns out, they’re the only Crowns that the Saskatchewan Party supports keeping publicly owned.

Responding to the Province’s Speech from the Throne on March 18, 2004, June Draude, the Saskatchewan Party MLA for Kelvington-Wadena, confirms as much stating on her website:

“The major initiative appears to be an attempt to enshrine the Crowns to ensure they will be the engines of the economy. We have not seen the legislation so whether that means all 87 crowns or just the 4 major Crowns (which we support) will be looked at when the bill is introduced.”

On September 21, 2004, Saskatchewan Party Leader Brad Wall unveiled his economic vision for Saskatchewan in an address to more than 200 students at the University of Saskatchewan’s College of Commerce.

Page eight of the plan states: “Creative partnerships, investment in new and old economy infrastructure, a focus on postsecondary education and the removal of barriers to investment in each of our key economic sectors will replace direct government investment and intervention in the economy.”

“A Saskatchewan Party government would implement this new vision for economic development through the creation of a new partnership called EnterpriseSaskatchewan.”

“EnterpriseSaskatchewan will be created as the central economic development agency of government replacing the economic development function currently resident in the Department of Industry and Natural Resources. The…government will cede significant control over the formation and implementation of economic development strategies to a broad partnership of economic stakeholders with the full support of the Premier and Executive Council,” the plan notes on page eleven.

Wall’s plan goes on to say “Rather than taking direction from government, EnterpriseSaskatchewan will establish provincial economic development goals and strategies for endorsement by Cabinet and the Legislature. Government departments, agencies and, in some cases, Crown corporations, will then be tasked with implementing these strategies. EnterpriseSaskatchewan will also monitor progress and measure results.”

EnterpriseSaskatchewan will focus on Saskatchewan’s key economic sectors and implement a broad plan consisting of approximately sixteen elements with one being to “develop a systematic and ongoing process to identify and remove barriers to growth in each of our key economic sectors.”

“[N]on-tax barriers that will require the attention and diligence of Enterprise Saskatchewan include direct competition to business from various government agencies and Crowns attempting to diversify from core functions, as well as policies of the Crowns themselves.”

The sixteenth and final element listed in Wall’s plan is Utility Crown Corporations and EnterpriseSaskatchewan:

“A Saskatchewan Party government will maintain Saskatchewan’s four major utilities (SaskPower, SaskTel, SaskEnergy and SGI) as government-owned Crown corporations and they will play a key role in the implementation of the Enterprise Saskatchewan Plan.

“As the central agency for designing, implementing, and monitoring provincial economic development, EnterpriseSaskatchewan will have coordinating role with regard to the major Crowns.”

This is significant because it’s here in his own words that Wall states his government would maintain just the four major crowns as public entities. And if that weren’t enough Enterprise Saskatchewan – which would be run by a broad partnership of economic stakeholders with significant control over the formation and implementation of economic development strategies with the full support of the Premier and Executive Council – will have a coordinating role in regards to the major Crowns.

On November 18, 2004, Bill No. 75 – The Crown Corporations Public Ownership Act was introduced in the legislature and read for the first time.

The Act, according to the government’s news release, was introduced “to preserve the public ownership of Crown corporations.”

“The Act would require a thorough study of any proposed privatization, including an analysis of the costs and benefits. A full report would be tabled with the Legislature, and a Committee of the Legislative Assembly would debate the proposed sale. A sale would be effective only after a general election, ensuring the people of Saskatchewan have the final say.”

This list goes well beyond the four major Crowns that Saskatchewan Party Leader Brad Wall says his party supports keeping publicly owned.

The newspaper article NDP plans law to keep Crowns public (StarPhoenix, Nov. 19, 2004) notes that “the legislation leaves out Crowns such as the Saskatchewan Research Council and the Saskatchewan Communications Network.”

“Selling off a major portion of a Crown without fully privatizing the company would require the same legislative process under the act, said [Crown Management Board Minister Pat] Atkinson.”

The Act received second reading on November 22, 2004. Prior to the vote Wayne Elhard, the Saskatchewan Party MLA for Cypress Hills, spoke on behalf of the party: “For the record, Mr. Speaker, the Saskatchewan Party supports this Bill. The Saskatchewan Party supports the continued public ownership of the major Crowns.”

Elhard went on to make the following comments:

“The Saskatchewan Party, like the majority of Saskatchewan people, believe the major Crowns should stay in public hands. We believe that the major Crowns and their employees do an excellent job of providing services to the people of Saskatchewan. Therefore, Mr. Speaker, we have no problem supporting this Bill.”

“Mr. Speaker, the Saskatchewan Party believes it is the role of government to provide essential services like power, like gas, like insurance, like telecommunications services, but they need to be directed to the people of Saskatchewan at the lowest possible cost.”

“Therefore, Mr. Speaker, the Saskatchewan Party supports The Crown Corporations Public Ownership Act and commits to the people of Saskatchewan that a Saskatchewan Party government will keep the major Crowns publicly owned while focusing on providing the best possible service to Saskatchewan people, Mr. Speaker, all the while at the lowest possible cost. Thank you.”

What Elhard did not tell the people of Saskatchewan, though, is that aside from the four major Crowns – power, gas, insurance and telecommunications services – his party had no intention of keeping any of the other Crowns publicly owned. The scope of The Crown Corporations Public Ownership Act goes well beyond what Elhard said his party would commit to, yet he and his colleagues voted to support the Act as it was presented anyway. The Saskatchewan Party clearly wants to have it both ways and have misled not only the legislature but the people of the province.

With a unanimous vote of 57-0 the Act passed second reading and was referred to the Standing Committee on Crown and Central Agencies.

In Sask. Party refuses to fight on privatization (StarPhoenix, Nov. 25, 2004) anti-NDP columnist Randy Burton said “the NDP’s “Save the Crowns” bill suggests no future government could repeal the legislation without first holding public hearings on the topic.”

Not so, according to Burton’s column.

“Anything a legislature can do, a legislature can undo,” said Gordon Barnhart, the University of Saskatchewan secretary who has also been the clerk to both the provincial legislature and the federal Senate.

“The future legislators, including the NDP if they had to and wanted to, could strike down the first bill. I mean amend it by totally deleting it,” said Barnhart.

Burton went on to say “Alternatively, this government or any new one could amend the bill by taking out the provision requiring public hearings prior to repeal of the bill and then just go ahead and abolish it. With it would go the requirement for an election prior to any privatization, and all the rest of it.”

“It’s hard to believe Saskatchewan Party Leader Brad Wall doesn’t know this, but if he does, he’s keeping it to himself.”

Following a one-day hearing before the Standing Committee on Crown and Central Agencies on November 29th the Act was read a third time and passed on November 30, 2004.

The question of legislative changes and its importance to advancing Wall’s Enterprise Saskatchewan scheme revealed itself a year later.

On December 8, 2005, Saskatchewan Party Leader Brad Wall gave a speech to the North Saskatoon Business Association (NSBA) at the Delta Bessborough in Saskatoon. Wall used the occasion to peddle his Enterprise Saskatchewan plan.

Wall talked about the “first six months of a new government” and “the implementation of the Enterprise Saskatchewan plan” if his party is elected.

In the first week of a Saskatchewan Party government Wall said “A public/private partnership called Enterprise Saskatchewan is announced as the replacement for the Industry department of the department of Industry and Resources.”

“At the outset, we will direct Enterprise Saskatchewan to establish sector teams for the economic sectors that business has told me can drive true job creating economic growth in Saskatchewan,” Wall said.

“Each team will have one month to prepare its first inventory of the barriers to growth holding that sector back from reaching its full potential.”

Wall told the audience “The terms of reference of Enterprise Saskatchewan also include the end of government picking winners and losers in the economy” and that “These initiatives are non-negotiable and are hard wired right into Enterprise Saskatchewan. Legislative changes where necessary will be readied for the first Legislative session.”

Wall’s Enterprise Saskatchewan plan promises to “identify and remove barriers to growth” and already targets Crown corporations as a non-tax barrier. Wall would seem more than prepared to use legislative changes to ensure that his plans are accomplished.

In February 2007 the Saskatchewan Party Policy Book: Pride with Purpose was released. The document brings together the work that the party has done over the past three years including Enterprise Saskatchewan and a multitude of Saskatchewan Party Policy Resolutions.

In essence, the Saskatchewan Party Policy Book is leader Brad Wall’s agenda and will form much of the basis of his party’s platform in the next election. It will represent Wall’s mandate should he become premier.

Among the party policy resolutions is CC05-1: Keeping the Major Crowns Public that states:

“Be it resolved that a Saskatchewan Party government supports The Crown Corporations Public Ownership Act and will retain public ownership of our major Crown corporations as important tools in the provision of utility services to Saskatchewan families and businesses and important partners in the economic development of Saskatchewan.”

Simply stated, this resolution misleads the people of Saskatchewan. It has been established that the Saskatchewan Party only supports keeping the four major Crown corporations publicly owned. Its support for The Crown Corporations Public Ownership Act only goes so far as to include SaskPower, SaskTel, SaskEnergy and SGI.

“Be it resolved that the Saskatchewan Party endorses “The Promise of Saskatchewan: A New Vision for Saskatchewan’s Economy” as presented by Saskatchewan Party Leader Brad Wall as the foundation for the economic development plan of a Saskatchewan Party government.”

This policy resolution ensures that Wall’s Enterprise Saskatchewan is established. It would also seem to give Wall the mandate to remove alleged barriers even if doing so meant legislative changes.

Saskatchewan Party policy resolution EC05-3: Establishing the Right Economic Development Priorities states in part:

“Be it resolved that the economic development priorities of a Saskatchewan Party government will be to:

d) Maintain public ownership of Saskatchewan’s major crown utilities focused on the provision of power, telecommunications services, natural gas transmission and distribution and insurance services to Saskatchewan families and businesses at the lowest possible cost.”

This policy confirms once and for all that the Saskatchewan Party supports only the public ownership of the four major Crowns.

Saskatchewan Party policy resolution EC05-8: Performing a Service-Based Review of Government Operations states:

“Be it resolved that a Saskatchewan Party government will perform a service-based review of government operations to ensure all parts of government are:

a) Serving a compelling public interest;b) Affordable within the fiscal environment of the province;c) Providing services in the most efficient way possible;d) Accountable to the taxpayer; ande) Removing barriers to the development of an entrepreneurial and enterprising economy.”

This policy would provide Wall with a mandate to review “all parts of government” that could include, if necessary, the use of legislative changes to further the Enterprise Saskatchewan plan of identifying and removing barriers. The Crowns are identified in Enterprise Saskatchewan as barriers.

The following three Saskatchewan Party policy resolutions relate to Crown Corporations:

“CC05-5: Renewing Crown Corporation Mandates Every Five Years

Be it resolved that a review of the mandate and dividend policy of the major Crown corporations be completed every five years with participation from business, labour, stakeholders and citizen representatives.

Be it resolved that a Saskatchewan Party government will immediately review provincial government competition with the private sector through government departments, agencies and Crown corporations in the delivery of services to the people of Saskatchewan.

Be it resolved that Saskatchewan Party government will review all existing out-of-province Crown business ventures and place a moratorium on further out-of-province investment by Crown corporations until the review is complete.”

Anything that gets reviewed tends to result in recommendations to address the areas of concern that might have been identified. Enterprise Saskatchewan has been entrenched as party policy and ensures “that a Saskatchewan Party government will replace direct government investment and intervention in the economy with…The removal of barriers to private sector investment in Saskatchewan’s key economic sectors.” Should a future review of Crown operations and policies determine that barriers exist and recommend their removal you can bet a Brad Wall government would move to do just that even if it meant legislative changes. Wall made that clear in his December 8, 2005, speech to the North Saskatoon Business Association.

Conclusion

It appears that the Saskatchewan Party has misled the public on its support of The Crown Corporations Public Ownership Act and continues to do so today.

In a March 10, 2007, letter to editor of the Regina Leader-Post, Saskatchewan Party MLA Ken Krawetz said “The Saskatchewan Party believes the provincial government needs to pursue a growth agenda. While that includes removing barriers to growth, such as the removal of inter-provincial trade barriers, it also means…Maintaining public ownership of Saskatchewan’s major Crown corporations.”

What Krawetz did not say is that his party only supports the Act insofar as it relates to the four major Crowns: SaskPower, SaskTel, SaskEnergy and SGI. All other Crown corporations would appear to be in jeopardy should the Saskatchewan Party form the next government. In June 2002, former Saskatchewan Party MLA Brenda Bakken said her party believed they “should be dispensed.” That strategy appears not to have changed.

In an August 16, 2007, letter to the editor of the Yorkton News Review, Saskatchewan Party candidate for Yorkton, Greg Ottenbreit repeats what now seems to have become the official party line on Crown corporations and is something that will likely be repeated often during the upcoming election:

“A Saskatchewan Party government will keep Saskatchewan’s major Crowns publicly owned. Saskatchewan Party MLAs unanimously supported the Crown Corporations Public Ownership Act introduced by the NDP government in 2004 and our party policy states: “That a Saskatchewan Party government supports the Crown Corporation Public Ownership Act and will retain public ownership of our major Crown corporations as important tools in the provision of utility services to Saskatchewan families and businesses and important partners in the economic development of Saskatchewan.”

Again, what the Saskatchewan Party is not telling people is that its support of the Crowns begins and ends with the four major ones with the rest apparently being expendable.

A vote for the Saskatchewan Party is a vote for the Saskatchewan Party Policy Book and a process that could begin the review and dispensing of nearly all of the province’s Crown corporations.